MANAGEMENT AGREEMENT
EnTrustPermal Management LLC
This MANAGEMENT AGREEMENT ("Agreement") is made this 20 day
of May, 2016, by and between Xxxx Xxxxx Partners Variable Equity
Trust (the "Trust") and EnTrustPermal Management LLC, a Delaware
limited liability company (the "Manager").
WHEREAS, the Trust is a Maryland statutory trust registered
as a management investment company under the Investment Company
Act of 1940, as amended (the "1940 Act");
WHEREAS, the Manager is engaged primarily in rendering
investment advisory and management services and is registered as
an investment adviser under the Investment Advisers Act of 1940,
as amended (the "Advisers Act");
WHEREAS, the Trust wishes to retain the Manager to provide
trading, investment advisory and management services to the
Trust with respect to the series of the Trust designated in
Schedule A annexed hereto (the "Fund"); and
WHEREAS, the Manager is willing to furnish such services on
the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual
covenants herein contained, it is agreed as follows:
1. The Trust hereby appoints the Manager to act as investment
adviser of the Fund for the period and on the terms set forth in
this Agreement. The Manager accepts such appointment and agrees
to render the services herein set forth, for the compensation
herein provided.
2. The Fund shall at all times keep the Manager fully
informed with regard to the securities, Commodity Interests (as
defined in paragraph 3) and other investments owned by it, its
funds available, or to become available, for investment, and
generally as to the condition of its affairs. It shall furnish
the Manager with such other documents and information with
regard to its affairs as the Manager may from time to time
reasonably request.
3. (a) Subject to the supervision of the Trust's Board of
Trustees (the "Board"), the Manager shall regularly provide the
Fund with investment research, advice, management and
supervision and shall furnish a continuous investment program
for the Fund's portfolio of securities, Commodity Interests and
other investments consistent with the Fund's investment
objectives, policies and restrictions, as stated in the Fund's
current Prospectus and Statement of Additional Information. For
purposes of this Agreement, Commodity Interests include
commodity futures (including futures on broad-based securities
indexes or interest rate futures), forward contracts, foreign
exchange transactions, options on commodity futures, swaps,
swaptions and certain other instruments regulated by the
Commodity Futures Trading Commission (the "CFTC"). The Manager
shall determine from time to time what securities, Commodity
Interests and other investments will be purchased, retained,
sold or exchanged by the Fund and what portion of the assets of
the Fund's portfolio will be held in the various securities,
Commodity Interests and other investments in which the Fund
invests, and shall implement those decisions (including the
execution of investment documentation), all subject to the
provisions of the Trust's Declaration of Trust and By-Laws
(collectively, the "Governing Documents"), the 1940 Act, the
Commodity Exchange Act, as amended (the "CEA") and the
applicable rules and regulations promulgated by the Securities
and Exchange Commission (the "SEC") and the CFTC and
interpretive guidance issued by the SEC staff and the CFTC
staff, any exemptive orders or other relief issued by the SEC or
the CFTC applicable to the Fund, any other applicable federal
and state law, the investment objectives, policies and
restrictions of the Fund referred to above, and any other
specific policies adopted by the Board and disclosed to the
Manager. The Manager is authorized as the agent of the Trust to
give instructions to the custodian of the Fund (the "Custodian")
and any Fund sub-custodian or prime broker as to deliveries of
securities, Commodity Interests and other investments and
payments of cash in respect of transactions or cash margin calls
for the account of the Fund. Subject to applicable provisions of
the 1940 Act and direction from the Board, the investment
program to be provided hereunder may entail the investment of
all or substantially all of the assets of the Fund in one or
more investment companies. To the extent not delegated to a
subadviser, commodity trading advisor ("CTA") or commodity pool
operator ("CPO"), the Manager will place orders pursuant to its
investment determinations for the Fund either directly with the
issuer or with any broker or dealer, foreign currency dealer,
futures commission merchant, counterparty or others selected by
it. In connection with the selection of such brokers or dealers
and the placing of such orders, subject to applicable law,
brokers or dealers may be selected who also provide brokerage
and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) to the Fund and/or the other accounts over
which the Manager or its affiliates exercise investment
discretion. The Manager is authorized to pay a broker or dealer
who provides such brokerage and research services a commission
for executing a portfolio transaction for the Fund, which is in
excess of the amount of commission another broker or dealer
would have charged for effecting that transaction, if the
Manager determines in good faith that such amount of commission
is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This
determination may be viewed in terms of either that particular
transaction or the overall responsibilities that the Manager and
its affiliates have with respect to accounts over which they
exercise investment discretion. The Board may adopt policies
and procedures that modify and restrict the Manager's authority
regarding the execution of the Fund's portfolio transactions
provided herein. The Manager shall also provide advice and
recommendations with respect to other aspects of the business
and affairs of the Fund, shall exercise voting rights, rights to
consent to corporate action and any other rights pertaining to
the Fund's portfolio securities subject to such direction as the
Board may provide, and shall perform such other functions of
investment management and supervision as may be directed by the
Board. The Manager may execute on behalf of the Fund certain
agreements, instruments and documents in connection with the
services performed by it under this Agreement. These may
include, without limitation, brokerage agreements, repurchase
agreements, reverse repurchase agreements, clearing agreements,
account documentation, futures and option agreements, swap
agreements, limited partnership agreements, derivative master
agreements, other investment-related agreements, and any other
agreements, documents, schedules, annexes, instruments,
releases, consents, elections and confirmations the Manager
believes are appropriate or desirable in performing its duties
under this Agreement.
(b) Subject to the direction and control of the Board, the
Manager shall perform such management services as may from time
to time be reasonably requested by the Fund as necessary for the
provision of investment and trading advisory and related
services to the Fund, such as (i) oversight of the Fund's
subadvisers, CTAs and CPOs; (ii) providing certain compliance
and regulatory reporting services, and (iii) providing
assistance with the preparation of Board materials, registration
statements, proxy statements and reports and other
communications to shareholders. Notwithstanding the foregoing,
the Manager shall not be deemed to have assumed any duties with
respect to, and shall not be responsible for, the distribution
of the shares of the Fund, nor shall the Manager be deemed to
have assumed or have any responsibility with respect to
functions specifically assumed by the Custodian or any transfer
agent, fund accounting agent, fund administrator, shareholder
servicing agent or other agent, in each case employed by the
Fund to perform such functions.
(c) The Fund hereby authorizes any entity or person
associated with the Manager, which is a member of a national
securities exchange, to effect any transaction on the exchange
for the account of the Fund which is permitted by Section 11(a)
of the Exchange Act and Rule 11a2-2(T) thereunder, and the Fund
hereby consents to the retention of compensation for such
transactions in accordance with Rule 11a2-2(T)(a)(2)(iv).
Notwithstanding the foregoing, the Manager agrees that it will
not deal with itself, or with members of the Board or any
principal underwriter of the Fund, as principals or agents in
making purchases or sales of securities or other property for
the account of the Fund, nor will it purchase any securities
from an underwriting or selling group in which the Manager or
its affiliates is participating, or arrange for purchases and
sales of securities between the Fund and another account advised
by the Manager or its affiliates, except in each case as
permitted by the 1940 Act and in accordance with such policies
and procedures as may be adopted by the Fund from time to time,
and will comply with all other provisions of the Governing
Documents and the Fund's then-current Prospectus and Statement
of Additional Information relative to the Manager and its
directors and officers.
(d) The Fund may establish one or more wholly-owned
subsidiaries of the Fund through which it may conduct a
significant portion of its investments in Commodity Interests.
(e) When the Fund adopts policies, procedures or restrictions
to the Governing Documents, and amendments or revisions thereto,
the Fund will provide the documents to the Manager in advance of
their implementation.
4. Subject to the Board's approval and consistent with the
1940 Act and any SEC exemptive relief or guidance thereunder,
the Manager or the Fund may enter into, or terminate, contracts
with one or more subadvisers, CTAs or CPOs, including without
limitation, affiliates of the Manager, in which the Manager
delegates to such subadvisers, CTAs or CPOs any or all its
duties specified hereunder, on such terms as the Manager will
determine to be necessary, desirable or appropriate, provided
that in each case the Manager shall supervise the activities of
each such subadviser, CTA or CPO and further provided that such
contracts impose on any subadviser, CTA or CPO bound thereby all
the conditions to which the Manager is subject hereunder and
that such contracts are entered into in accordance with and meet
all applicable requirements of the 1940 Act and the CEA. The
Manager shall have the authority to allocate all or a portion of
the Fund's assets for portfolio management purposes among
subadvisers, CTAs and CPOs.
5. (a) The Manager, at its expense, shall supply the Board
and officers of the Trust with all information and reports
reasonably required by them and reasonably available to the
Manager and, to the extent not provided by other parties, shall
furnish the Fund with office facilities, including space,
furniture and equipment and all personnel reasonably necessary
for the operation of the Fund. With respect to the Fund's
transactions in securities, Commodity Interests and other
investments, the Manager shall oversee the maintenance of all
books and records in accordance with all applicable federal and
state laws and regulations, except to the extent arrangements
have been made for such books and records to be maintained by
any fund administrator or other agent of the Fund. In
compliance with the requirements of Rule 31a-3 under the 1940
Act, the Manager hereby agrees that any records that it
maintains for the Fund are the property of the Fund, and further
agrees to surrender promptly to the Fund any of such records
upon the Fund's request. The Manager further agrees to arrange
for the preservation of the records required to be maintained
hereunder in accordance with all applicable laws and
resolutions, including compliance with the requirements of Rules
31a-1 and 31a-2 under the 1940 Act and CFTC Rule 4.23. The
Manager shall authorize and permit any of its directors,
officers and employees, who may be elected as Board members or
officers of the Fund, to serve in the capacities in which they
are elected.
(b) The Manager shall bear all expenses, and shall furnish
all necessary services, facilities and personnel, in connection
with its responsibilities under this Agreement. Other than as
herein specifically indicated, the Manager shall not be
responsible for the Fund's expenses, including, without
limitation: advisory fees; distribution fees; interest; taxes;
governmental fees; third-party risk management, collateral
management and fund compliance reporting expenses; voluntary
assessments and other expenses incurred in connection with
membership in investment company organizations; organizational
costs of the Fund; the cost (including brokerage commissions,
transaction fees or charges, if any) in connection with the
purchase or sale of the Fund's securities, Commodity Interests
and other investments and any losses in connection therewith;
fees, costs and expenses associated with any prime brokerage
arrangement (including the costs of any securities borrowing
arrangement), tri-party custody arrangements; acquired fund
fees and expenses; Form CPO-PQR filings that relate to the Fund;
costs of forming and maintaining subsidiaries; dividend and
interest expenses on securities sold short; fees and expenses of
custodians, administrators, transfer agents, registrars,
independent pricing vendors or other agents; Fund legal
expenses; loan commitment fees; expenses relating to the issuing
and redemption or repurchase of the Fund's shares and servicing
shareholder accounts; expenses of registering and qualifying the
Fund's shares for sale under applicable federal and state law;
expenses of preparing, setting in print, printing and
distributing prospectuses and statements of additional
information and any supplements thereto, reports, proxy
statements, notices and dividends to the Fund's shareholders;
costs of stationery; website costs; costs of meetings of the
Board or any committee thereof, meetings of shareholders and
other meetings of the Fund; Board fees; audit fees; travel
expenses of officers, members of the Board and employees of the
Fund, if any; and the Fund's pro rata portion of premiums on any
fidelity bond and other insurance covering the Fund and its
officers, Board members and employees; litigation expenses and
any non-recurring or extraordinary expenses as may arise,
including, without limitation, those relating to actions, suits
or proceedings to which the Fund is a party and the legal
obligation which the Fund may have to indemnify the Fund's Board
members and officers with respect thereto.
6. The Manager may delegate some or all of its duties under
this Agreement to affiliated investment advisers or other
service providers (each a "Manager-Delegatee"); provided,
however, that (i) the Manager provides prior written notice to
the Fund and the Fund consents in writing, (ii) any delegation
of advisory duties is subject to and conditioned on the approval
of the Board and/or the Fund's shareholders as may be required
pursuant to Xxxxxxx 00 xx xxx 0000 Xxx, (xxx) any such
delegation complies with applicable exemptive relief, rule or
no-action position on which the Fund relies; (iv) no additional
charges, fees or other compensation will be paid by the Fund for
such services, (v) the Manager hereby agrees to advise the Fund
of any changes required to be made to the disclosure in the
Fund's registration statement relating to the Fund's portfolio
managers provided by the Manager or any Manager-Delegatee, and
(vi) the Manager at all times remains liable to the Fund for its
obligations hereunder regardless of whether services hereunder
are provided by the Manager or any Manager-Delegatee. To the
extent that such delegation occurs, references to the Manager
herein also shall be deemed to include reference to any Manager-
Delegatee, as the context may require.
7. No member of the Board, officer or employee of the Trust
or Fund shall receive from the Trust or Fund any salary or other
compensation as such member of the Board, officer or employee
while he is at the same time a director, officer, or employee of
the Manager or any affiliated company of the Manager, except as
the Board may decide. This paragraph shall not apply to Board
members, executive committee members, consultants and other
persons who are not regular members of the Manager's or any
affiliated company's staff.
8. As compensation for the services performed and the
expenses assumed by the Manager, the Fund shall pay the Manager,
within five (5) days after the last day of each month, a fee,
computed daily at an annual rate set forth on Schedule A annexed
hereto. The first payment of the fee shall be made within five
(5) days after the end of the month succeeding the effective
date of this Agreement. If this Agreement is terminated as of
any date not the last day of a month, such fee shall be paid
within five (5) days after the end of the month of termination
and shall be pro rated based upon the number of days in such
month for which this Agreement was effective bears to the total
number of days in such month; provided, however, that if the
Fund invests all or substantially all of its assets in another
registered investment company for which the Manager or an
affiliate of the Manager serves as investment adviser or
investment manager, the annual fee computed as set forth on such
Schedule A shall be reduced by the aggregate management fees
allocated to that Fund for the Fund's then-current fiscal year
from such other registered investment company. The average
daily net assets of the Fund shall in all cases be based only on
business days and be computed as of the time of the regular
close of business of the New York Stock Exchange, or such other
time as may be determined by the Board.
9. The Manager represents and warrants that it: (i) is
registered as an investment adviser under the Advisers Act and
will continue to be so registered for so long as this Agreement
remains in effect; (ii) is not prohibited by the 1940 Act, the
Advisers Act, the CEA or other law, regulation or order from
performing the services contemplated by this Agreement; (iii)
has reviewed the requirements for registration as a CPO under
the CEA and is either registered as a CPO and a member of the
National Futures Association (the "NFA") or is relying on an
exemption or exclusion from registration as a CPO or is subject
to exemptive relief by the CFTC from being a CPO with respect to
the Fund; (iv) has adopted and implemented a written code of
ethics complying with requirements of Rule 17j-1 under the 1940
Act; (v) has the authority to enter into and perform the
services contemplated by this Agreement; and (vi) has taken all
necessary corporate action to authorize the execution, delivery
and performance of this Agreement.
10. Except as may otherwise be provided by the 1940 Act, the
CEA or any other federal securities law, neither the Manager nor
any of its partners, shareholders, directors, officers and
employees or the partners, shareholders, directors, officers and
employees of any affiliates performing services for the Trust or
Fund contemplated hereby (collectively, "Manager Affiliates")
shall be liable for any losses, claims, damages, liabilities or
litigation (including legal and other expenses) ("Losses")
incurred or suffered by the Trust as a result of any act or
omission of the Manager or the Manager Affiliates with respect
to the Fund, except that nothing in this Agreement shall operate
or purport to operate in any way to exculpate, waive or limit
the liability of the Manager or the Manager Affiliates for any
and all Losses to which the Trust, all affiliated persons
thereof (within the meaning of Section 2(a)(3) of the 0000 Xxx)
and all controlling persons (as described in Section 15 of the
Securities Act of 1933, as amended (the "1933 Act"))
(collectively, "Trust Affiliates") may become subject under the
1933 Act, the 1940 Act, the Advisers Act, the CEA, or under any
other statute, or common law or otherwise arising out of or
based on any willful misconduct, bad faith, reckless disregard
or gross negligence of the Manager in the performance of any of
its duties or obligations hereunder.
11. Nothing in this Agreement shall limit or restrict the
right of any director, officer, or employee of the Manager who
may also be a Board member, officer, or employee of the Trust or
the Fund, to engage in any other business or to devote his time
and attention in part to the management or other aspects of any
other business, whether of a similar nature or a dissimilar
nature, nor to limit or restrict the right of the Manager to
engage in any other business or to render services of any kind,
including investment advisory and management services, to any
other fund, firm, individual or association. If the purchase or
sale of securities, Commodity Interests and other investments
consistent with the investment policies of the Fund or one or
more other accounts of the Manager is considered at or about the
same time, transactions in such securities, Commodity Interests
and other investments will be allocated among the accounts in a
manner deemed equitable by the Manager. Such transactions may
be combined, in accordance with applicable laws and regulations,
and consistent with the Manager's policies and procedures as
presented to the Board from time to time.
12. For the purposes of this Agreement, the Fund's "net
assets" shall be determined as provided in the Fund's then-
current Prospectus and Statement of Additional Information and
the terms "assignment," "interested person," and "majority of
the outstanding voting securities" shall have the meanings given
to them by Section 2(a) of the 1940 Act, subject to such
exemptions as may be granted by the SEC by any rule, regulation
or order.
13. This Agreement will become effective with respect to the
Fund on the date set forth below the Fund's name on Schedule A
annexed hereto, provided that it shall have been approved by the
Trust's Board and by the shareholders of the Fund in accordance
with the requirements of the 1940 Act and, unless sooner
terminated as provided herein, will continue in effect through
the second anniversary of the date of effectiveness.
Thereafter, if not terminated, this Agreement shall continue in
effect with respect to the Fund, so long as such continuance is
specifically approved at least annually (i) by the Board or
(ii) by a vote of a majority of the outstanding voting
securities of the Fund, provided that in either event the
continuance is also approved by a majority of the Board members
who are not interested persons of any party to this Agreement,
by vote cast in person at a meeting called for the purpose of
voting on such approval.
14. This Agreement is terminable with respect to the Fund
without penalty by the Board or by vote of a majority of the
outstanding voting securities of the Fund, in each case on not
more than 60 days' nor less than 30 days' written notice to the
Manager, or by the Manager upon not less than 90 days' written
notice to the Fund, and will be terminated upon the mutual
written consent of the Manager and the Trust. This Agreement
shall terminate automatically in the event of its assignment by
the Manager and shall not be assignable by the Trust without the
consent of the Manager.
15. The Manager agrees that for services rendered to the
Fund, or for any claim by it in connection with services
rendered to the Fund, it shall look only to assets of the Fund
for satisfaction and that it shall have no claim against the
assets of any other portfolios of the Trust. The undersigned
officer of the Trust has executed this Agreement not
individually, but as an officer under the Trust's Declaration of
Trust and the obligations of this Agreement are not binding upon
any of the Trustees, officers or shareholders of the Trust
individually.
16. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, and no
material amendment of the Agreement shall be effective until
approved, if so required by the 1940 Act, by vote of the holders
of a majority of the Fund's outstanding voting securities.
17. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all
prior agreements and understandings relating to the subject
matter hereof. Should any part of this Agreement be held or
made invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby.
This Agreement shall be binding on and shall inure to the
benefit of the parties hereto and their respective successors.
This Agreement may be executed simultaneously in counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of the
State of New York.
[signature page to follow]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers thereunto duly
authorized.
XXXX XXXXX PARTNERS VARIABLE
EQUITY TRUST
By:
__________________________________
________
Name:
Title:
ENTRUSTPERMAL MANAGEMENT LLC
By:
__________________________________
________
Name:
Title:
Schedule A
Permal Alternative Select VIT Portfolio
Date:
May 20, 2016
Fee:
1.90% of the Fund's average daily net assets
16237208.4
12
EXECUTION VERSION
